Monday, May 13, 2013

Prop 13: Ripe for Reform

It’s almost as though its potential
purchase by the Koch Empire is spurring the Los
Angeles Times to provide proof of its relevance in the past month. The paper followed up on its illuminating
series of stories on the changing character of the American workplace with
several stories about what political commentators are fond of calling the “third
rail” of California politics—Proposition 13.

Proposition 13, passed in 1978 thanks to
the machinations of the state’s corporate community, the rise of economic
fundamentalism within the Republican Party, and the failure of California’s
Governor, Jerry Brown, to govern. The
initiative not only raised to two-thirds the threshold for passing revenue
increases in the Assembly and Senate, but also took property tax off the table
as a flexible instrument for managing the state’s revenue, and forced the centralisation
of much of the state’s service provision.

The initiative, which amounts to what
Tom Paine called “government from the grave” wrote specific tax details into
California’s famously overburdened state constitution, enshrined a system of minority
rule which continues to empower the state’s fundamentalist minority, and has
been responsible for the decline in many of our state’s once-fine institutions.

In subsequent decades, California’s
corporate titans have with their Republican allies spent a lot of money preying
on the fears of voters and trying to convince them that any amount of tinkering
with this undemocratic and ill-advised initiative amounts to nothing less than
an assault on Californians’ liberties.
These economic and political interests have managed to play voters for
suckers and elide the interests of the fabulously wealthy with those of middle-
and working-class Californians who would actually benefit from reinvestment in
the state’s institutions instead of their continued evisceration.

The
Times reported how over the years,
the extraordinarily wealthy have used Prop 13 to circumvent their tax
obligations to their community. That
they do so legally makes their actions no less reprehensible, nor does it
lessen the damaging effects of their dodge.
At the same time, the Times reported,
homeowners have paid a rising percentage of property tax, while businesses
continue to evade their taxes.

The
Times highlighted the case of Michael
Dell, who “has saved more than a million dollars a year in taxes on a
landmark Santa Monica hotel by exploiting a gaping legal loophole in the rules
that govern how Proposition 13 is applied”.
It has been widely recognised in recent years that the gap between the
wealthy and those who are struggling has been growing at an untenable rate, and
this fact bears out what the Times
describes as John Paul Stevens’ dissenting opinion when Prop 13 was tested in
court: namely, that Prop 13’s “formula created a medieval situation favouring
land-owning ‘squires’ who ‘voted themselves a tremendous windfall’”.

Perhaps most disturbingly, the wealth
gap in California and elsewhere maps along generational lines, and Prop 13 is
just one example of the generational war that is being waged by those who would
like to preserve things like social security for the elderly whilst changing
the program for those currently paying into it, and who benefited from their
parents’ generous investment in the social service and safety net (think free
or extraordinarily cheap UC tuition, well-funded schools, infrastructure
growing commensurate with social needs) but are now breaking the social
contract by indulging in a fit of selfishness and starving the same programs
and institutions.

Interestingly, the
Times also reported how “two
prominent defenders of Proposition 13 spoke out...against ‘gimmicks’ used by
some companies to avoid paying additional property taxes when buying real
estate in California”. What this tells
me is that the Howard Jarvis Taxpayers Association and the Small Business
Action Committee—two regressive, anti-social, fundamentalist organisations—have
read the writing on the wall and realise that Prop 13 is fast becoming
untenable in California’s moral economy.

By critiquing what are supposed
aberrations of their pet initiative, they are opening the door to cosmetic
reform which will leave the basic “gimmicks” of the initiative intact: most
egregiously its undemocratic supermajority requirement and the undifferentiated
property tax which protects some generations at the expense of others. The leadership of these two bodies are trying
to pretend that disproportionate corporate benefits from Prop 13 are something
new, a claim they know to be disingenuous.

In the past, these groups have been
unconditional in their defence of Prop 13 and all of its abuses, and that they
are now moderating their stance suggests that they are afraid that voters are
on the verge of calling them out on their decades-long demolition of California’s
public sphere. They will undoubtedly
begin doing their best to head off serious reform by proposing minor measures
to take the pressure off what is an explosive situation given the crisis of
K-12 education, the evaporation of early childhood education, and the decline
of higher education in the state, to say nothing of an ever-more splintered
public welfare system.

California could use a reform-minded
coalition to push for an overhaul not just of Prop 13, but of the whole rotting
edifice that is our political structure.
Thirty-five years ago, Governor Jerry Brown had the opportunity to avert
a long-term crisis by tackling the ills that made Prop 13 so popular. He failed, and was overtaken by events. Today, once again under his stewardship, the
state faces a similar crossroads. This
time it is one at which it is easier to imagine a happier outcome for
California. The Governor had better
learn from his earlier tenure and demonstrate the reforming leadership that our
state so much needs. Otherwise he will,
once again, find himself standing idly on the roadside. Only this time there will be no follow-up
act.

1 comment:

Nice use of the word elide.Yes, K-12 education is in a state of crisis, especially for LA Unified and Oakland."A December poll by the Public Policy Institute of California found that 58% of likely voters favor a so-called split roll, in which commercial properties would be reassessed periodically regardless of their ownership." --LA Times

About Me

I am from Northern California, and am the fifth generation of my family to have lived in the Golden State. Now I live next-door in the Silver State, where I work as an assistant professor of history at the University of Nevada, Las Vegas. I research and write about colonialism and decolonization in Africa, teach European, African, environmental, and colonial history, and write this blog, mostly about politics, sometimes about history, and occasionally about travels or research. This blog also appears on the website of the Redding Record Searchlight.